It is February 2021 and Sandra is looking to maximize her RRSP contribution for a deduction on
Question:
It is February 2021 and Sandra is looking to maximize her RRSP contribution for a deduction on her 2020 income tax return. She has never been part of a Registered Pension Plan. What is the maximum amount that she can contribute to her RRSP and claim on her 2020 personal income tax returns (include carry-forward amounts)? She has provided you with the following information:
-Salary in 2018 $10,000 (part-time employment to help with her tuition when she was 19).
-Salary in 2019 $80,000. (full-time employment, she was 20).
-Salary in 2020 $85,000. (full-time employment, she was 21).
-Current salary in 2021 $90,000. (full-time employment, she is 22).
-RRSP contribution made previously and deducted on her 2019 tax return for $1,300
Registered Retirement Savings Plan (RRSP): Annual Limits Formula for RRSP contribution limit: 18% of your previous year's earned income less your previous year's pension adjustment to an annual maximum. | |
Year | Annual maximum contribution limit |
2018 | $26,230 |
2019 | $26,500 |
2020 | $27,230 |
2021 | $27,830 |
$14,900
- $31,640
- $17,840
- $18,000
- $19,140
Business Law Text and Cases
ISBN: 978-1285185248
13th edition
Authors: Kenneth Clarkson, Roger LeRoy Miller, Frank Cross